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December 2018 edition

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The Assignment Report Events

Making a difference - Maximising learning outcomes and improving workflow in schools

14 February 2019, 13.45 to 17.45, Ironmonger's Hall, London

Confirmed panellists include: Steve Burnett, Managing Director, RM Education; Andrea Carr, Founder of Rising Stars; Paul Charman, Managing Director, FFT Education; Richard Marett, CEO, Whizz Education; Amanda Peck, Executive Director Marketing, Professional Group, McGraw-Hill Education; Josh Perry, Director, Assembly; Ian Rowe, Business Development Director, GCSEPod; and, Dan Sandhu, CEO, Sparx.

Paul Howells (CEO, Eteach Group), Julian Drinkall (CEO, AET) and Rupert Barclay (Managing Partner, Cairneagle)

The ceiling falls in on ABC Learning

publication date: Mar 31, 2008
author/source: Ed Tranham

Australian company ABC Learning Centres is still in discussions with Morgan Stanley Private Equity to sell 60% of its US business as it attempts to pay off the group’s A$1.16bn (£525m) of senior debt by 30 June. The proposed sale of the company’s UK voucher business and the previously announced A$250m (£115m) disposal of property assets will further reduce this bank debt.

The debt bubble created by ABC’s rapid acquisition spree has burst. The collapse of margin loans as the share price crumbled following poor half-year results (see March issue) has led founder Eddy Groves to dispose of all but 3,186 shares in the company, which he founded with his wife 20 years ago.

The disposal of 60% of ABC’s US business, Learning Care Group, will generate A$750m (£340) in cash proceeds plus up to £15m in 2009 subject to performance. The transaction values the US business at US$775m (£390m). According to ABC this implies a valuation of 14.1 EBITDA. In comparison, the US$1.3bn (£655m) acquisition of Bright Horizons Family Solutions by Bain Capital announced in January this year implies a value of 12.5 EBITDA based on Bright Horizons full year results to 31 December 2007.

In addition Morgan Stanley could end up with 10% of ABC having agreed to subscribe to ‘senior unsecured convertible notes’ but the value of these notes will depend on the share price when the deal is completed.

It is not yet known whether ABC will be seeking to dispose of its Busy Bees nursery business which operates a network of 33 owned and 15 managed centres, catering for 4,000 places in the UK. To date ABC has invested £102.2m in building this business via acquisitions.

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